Welfare State Classification: The Development of Central Eastern European Welfare
Two perspectives: path-dependence and policy diffusion
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| 2.2 Two perspectives: path-dependence and policy diffusion 2.2.1 Path-dependence perspective Path-dependence is a perspective used often to describe political and economic processes. According to Pierson (2004) path-dependence is often used, but a clear definition of the concept is rare. Scholars have attempted to define path-dependence; these definitions range from very narrow to extreme broad. In a broad way, path-dependence refers to the causal relevance of preceding stages in a temporal sequence (Pierson 2004: 252). Sewell (1996) states that path-dependence means “that what happened in a earlier point in time will affect the possible outcomes of a sequence of events occurring at a later point in time” (Sewell 1996: 262-3). This definition is very broad, it comes down to what happened in the past matters for the present. Hence, this definition is not very useful when conducting scientific research. A more narrow definition is given by Levi (1996). She says that path- dependence means “(….) that once a country or region has started down a track, the costs of reversal are very high. There will be other choice points, but the retrenchment of certain institutional arrangements obstruct an easy reversal of the initial choice” (Levi 1996: 28). She also uses a clear metaphor, she argues the following: “(…) a better metaphor is a tree (…). From the same trunk there are many different branches and smaller branches. Although it is possible to turn around or to climb from one to the other – and essential if the chosen branch dies - the branch on which a climber begins is the one she tends to follow” (Levi 1996: 28). In other words, when a certain individual, a business or a state chooses a certain direction, the person, business or state is induced to further movement into the same direction. Pierson (2004) links path-dependence to the so called increasing returns process. Such a process is characterized by the increasing probability of further steps along a certain path with each move down the path (Pierson 2004: 252). In other words, the more steps one takes on a path, the higher the chance that the next step will also be on this path. So when one walks down a certain path for a long the time it will be harder to go back or to switch paths. This is due to the fact that relative benefits of the current activity compared with other possible options increase over time. Hence, the costs of exit rise when taking another step. Each step along a particular produces consequences which make that path more attractive for the next round. When such effects accumulate a various or vicious cycle of self-reinforcing activity will be generated (Pierson 2004). Arthur (1994) has made several attempts to summarize the characteristics of increasing returns. He distinguishes four important characteristics, namely unpredictability, inflexibility, nonergodicity and potential path inefficiency. Unpredictability is because early events have a large effect and are partly random, many outcomes may be possible. One cannot predict ahead of time which of these possible end-states will be met. Inflexibility has to do with the fact that the farther into the process one is, the harder it becomes to shift from one path to another. Sufficient movement down a particular path may eventually lock in one solution. Nonergodicity has to do with the fact that all events, both relevant and irrelevant influence future decisions. Accidental events early in a sequence do not cancel out; they cannot be ignored. These events, even when they tend to be irrelevant, they still influence future choices. Potential path inefficiency refers to the fact that in the long-run, the outcome that becomes locked in may generate lower pay-offs that a forgone alternative would have (Arthur 1994; Pierson 2004). Pierson does state explicitly that earlier events and choices matter much more than later events and choices; history is very important (Pierson 2004: 253). North (1990) stresses that individuals, organizations and institutional arrangements are subject to increasing returns. He states that institutional arrangements, such as welfare states, induce complementary organizational forms, 7 which in turn may generate new complementary institutions. Also, North argues that, even though, again, individuals and organizations are subject to increasing returns, path dependent processes will often be most powerful at a macro level which involves complementary configurations of organizations and institutions (North 1990; Pierson 2004). Welfare states, which can be considered to be institutions at a macro level, are according to scholars thus most influenced by path- dependence. In other words, the organization of welfare states is based on earlier events that have taken place; it is influenced by history. Pierson (2004) is aware of two major difficulties concerning increasing returns arguments. The first argument is methodological; testing hypotheses based on path-dependence arguments is hard. The so called “few cases, many variables” is worsened, according to Pierson, by the fact that path- dependence arguments require one to evaluate sequences of several variables over time. The second difficulty Pierson refers to is the danger that the increasing returns concept suggests an overly static view of the social world. Many scholars believe that path-dependence is ignored by the evident dynamism of social life (Pierson 2004: 265). The above described path-dependence perspective refers to the fact that preceding steps in a particular direction induce further movement in the same direction. In other words, choices and events that have taken place in earlier stages will have influence on contemporarily choices and events. Pierson links path-dependence to increasing returns processes which are based on economic theory. As described above, increasing returns processes refer to the increasing probability of further steps along the same path with each move down the particular path. When looking at Central and Eastern European welfare states through a path-dependence perspective, one would expect welfare state regimes that would not fit into Esping-Andersen’s classification scheme. This is mainly caused by the fact that most countries have a history which differs significantly from the history of Western- European countries. The communist era has had a significant influence on today’s welfare regimes in the CEE countries (Deacon 1993). Within the CEE countries one can distinguish different types of welfare regimes; these findings will be discussed firmly in this chapter. Path-dependence theories state that once a particular path is chosen, thus when a countries chooses a particular organization of the welfare state, it is hard to change this path and thus to organize the welfare state differently. Hence, history and earlier events are, according to the path-dependence perspective, of great importance for the development of the welfare states. After a brief review of the path-dependence perspective and the increasing returns process one can conclude that CEE welfare states will not fit into Esping-Andersen’s classification scheme due to the fact that this scheme is based on Western- European welfare states. Pierson (2004) states explicitly that one might expect communist legacies to be strong enough to impost a distinct path of development on at least some of the post-communist countries (Pierson 2004). However, opinions about path-dependence differ; some scholars argue that policy diffusion takes place. The policy diffusion perspective argues that due to the transfer of ideas, knowledge and other resources to guide the development of these countries’ welfare states in the direction of the well-known welfare regimes (Fenger 2007: 4). The next paragraph will review the policy diffusion perspective extensively. Download 374.54 Kb. Share with your friends:
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